Legacy IT holds organisations back in ESG-focused future

Johannesburg, 29 Jun 2022
Nutanix Press Office
Read time 3min 10sec
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Steen Dalgas, cloud economist at Nutanix
Steen Dalgas, cloud economist at Nutanix

Legacy equipment being ‘sweated’ in data centres is costing organisations more than it should and becoming a liability in an era in which environmental and social governance (ESG) has become a top priority for business, regulators, shareholders and customers.

This emerged during a webinar on Netzero IT: Green IT as a business imperative, hosted by Nutanix in partnership with ITWeb.

Steen Dalgas, Senior Cloud Economist at Nutanix, said: “ESG has become a top priority in international organisations and is now causing tension in the boardroom. We’re already seeing ESG regulations from the European Union, but possibly more importantly, the investor community and customers are demanding a focus on ESG. In non-industrial companies, IT infrastructure – particularly the data centre – is the biggest contributor to CO2 emissions, so data centres are the area where organisations need to focus their ESG strategies first.”

Paul Smuts, Senior Cloud Economist at Nutanix, said: “There is growing pressure on boards from shareholders, customers and employees for organisations to have clear, robust ESG policies. Major international shareholders are trying to decarbonise their portfolios, but it’s not just institutional investors – we now also see fund managers coming out with ESG funds for the man on the street and these are growing fast. We’re also seeing ESG pressure from customers, with procurement officers making ESG a key section of RFP responses. This will get to a point where if you don’t meet emissions criteria, you won’t get past the RFP stage.”

Dalgas and Smuts noted that these international trends would impact organisations in Africa, as ESG in the supply chain became a priority,  too. Polls of webinar attendees revealed that 68% do not currently have a sustainability officer and 60% have not made a Net Zero Carbon Pledge.

Dalgas and Smuts said while carbon emissions were a major priority internationally, another factor driving organisations to reconsider their IT infrastructure and its power consumption was the rising cost of electricity.

Said Smuts: “Over recent months, we’ve come to realise electricity isn’t infinite and it’s no longer cheap. In Europe, we’ve seen a 50% increase in power costs in the past few months, driving customers to look to reduce costs with different architectures and by hosting it in different locations.”

Smuts explained that CO2 emissions are classified as Scope 1 – direct emissions; Scope 2 – direct purchased energy; and Scope 3 – indirect purchased energy via a supply chain, cloud and outsourcing. “The biggest contributor to Scope 2 is data centres, at around 25%,” he said.

Dalgas said: “Those organisations still ‘sweating their assets’ with very old infrastructure are incurring costs and hampering their ESG strategies. If you factor in emissions and power consumption now, you’ll see you need to get rid of all this old legacy infrastructure that’s clogging up the data centres.”

Smuts and Dalgas outlined how Nutanix Hyperconverged Infrastructure (HCI) integrated storage, networking and virtualisation slashes power consumption and carbon emissions.

Dalgas said: “Nutanix is getting customers ahead of the green IT curve. If we compare the footprint of Nutanix HCI versus a new, traditional three-tier data centre, we reduce power consumption by around 35%. Compared to a legacy data centre, we achieve an 80% – 90% reduction in power consumption and CO2 emissions. This illustrates that legacy IT is the ‘gas guzzler’ of the data centre.” 

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